THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

SUZANNE MALVEAUX, CNN ANCHOR: I'm Suzanne Malveaux. Happy new year. While many of you celebrating start of 2013, there are lawmakers in Washington, well, they are struggling now to reach a deal. Thirteen hours after the deadline for an agreement on the fiscal cliff, you've got House Republicans, they are set to start their meeting about now. Democrats in the House, they have been meeting with the vice president to talk about this as well. He was, of course, instrumental in getting the Senate deal passed. That happened in the wee hours of the morning.

So, the bottom line here is what did that agreement look like? Well, it would prevent middle class income taxes from going up. But would raise rates on the income of more than $400,000 a year for individuals or more than $450,000 for couples. Unemployment benefits for 2 million Americans would be extended for a year. What it doesn't address is the spending cuts, very controversial spending cuts. Lawmakers plan to revisit that difficult issue two months from now.

So, all eyes today, right now, are on the House for its vote. Dana Bash, she has been following this. She is live from Capitol Hill. Now, Dana, first of all, I want you to explain for us -- we know that there are two things that are happening, the Republicans who are meeting and we know that the vice president is meeting with the -- with the Democrats. When do we expect these two sides to get together and make a decision about whether or not they like what the Senate has put forward or whether they want to come up with something else or amend it in some way?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, let me just, before I answer that, tell you that I'm standing right near the House Republican meeting which is going to start in a few minutes and I might have to duck away because we're waiting for the House speaker to actually come by this camera. So, let me just warn you --

MALVEAUX: Sure.

BASH: -- in advance that that might happen.

MALVEAUX: We'll know, we'll know.

BASH: But to answer that question, what's going to happen, we are told, is that the House Republicans, of course, run the House, and they make the decision on when votes are. They are having the meeting right now, but we are told that that is not going to be the definitive or decisive meeting to decide when the vote will be on that fiscal cliff package and how they're going to vote on it, whether offer any amendments. That won't happen until, we're told, another meeting later this afternoon after members have a chance to digest whatever they hear right now.

So, that's sort of the state of play in terms of how things could come to be when it comes to the process. With regard to what's going on in another part of the Capital right now, Joe Biden is meeting with Democrats because a big part of the issue is whether or not, as you alluded to, both sides can gather together enough votes -- leaders of both parties get together enough votes to actually pass this in the House. House Democrat -- we're still operating under the 112th Congress, the last Congress. The new one won't be sworn in until later this week.

So, Republicans have a pretty health majority even if there are a significant number of Democrats who vote for this, you know, they're still going to need many Republicans to cross over. And so, what they're doing now with the Democrats, Suzanne, is that Joe Biden is trying to convince his own members not to break off because there are a lot of liberals, as we've been talking about, who simply don't like this either and say that they don't like the idea, for example, of keeping tax cuts in place for Americans and households making up $450,000. They think that's simply too high.

MALVEAUX: All right, Dana. We're going to be watching very closely. We're obviously going to come back to you as the developments warrant. A lot is taking place there behind the scenes. And, of course, in front of the cameras as well as they play out their own version trying to come up with something to avert the fiscal cliff. The Senate did make a decision, came up with a plan, but, of course, the House has to come up with its own plan and then somehow these two sides have to get together, cobble something together the president can sign.

I want to bring in our own Wolf Blitzer in Washington. And Wolf, the first thing here, you've got speaker Boehner and he is meeting with the Republican caucus on the House side. How effective is he in really getting his team on board? I mean, when he had that modest -- more modest plan, the plan B that he wanted to put forward, he couldn't get his own party to sign off on that. Is he a potent -- is he a powerful leader in the Republican party to get them on board for anything?

WOLF BLITZER, CNN HOST, "THE SITUATION ROOM": Yes, I think he will show that strength assuming he has Eric Cantor on board, Kevin McCarthy, some of the other young guns, as they lake to call themselves, in the House of Representatives. The other young Republican leaders, if he can get all of them together. He's not going to bring in all of the Tea Party activists in the Republican caucus, but together with the Democrats who will support him this time and the Republicans that could cobble together the 218 votes they need.

They have to do this, Suzanne, today or tomorrow because at noon on Thursday, the 113th Congress is sworn in. That's a new Congress, a new Senate, a new House of Representatives. And they have to start from scratch. The legislation that passed the Senate overwhelmingly in the middle of the night last night, that's going to have to be passed once again in the Senate if they don't get this done before Thursday at noon. And remember, tomorrow's a regular day on Wall Street. The markets are opening tonight here on the east coast in the United States. The Asian markets will be opening. And people will be watching very closely to see if there's stability, if there's continuity, if there's going to be a disrupter.

And the great fear, of course, is that the House of Representatives doesn't follow the Senate's lead and passes legislation that the president will immediately sign into law. There could be a breakdown in all of that. Taxes will go up on everyone, spending cuts will be imposed, the sequestration, mandatory defense, and domestic spending cuts will go into effect and that could be a major dislocation on the world markets.

MALVEAUX: And Wolf, let's talk a little about that, you know, the formal term sequestration. But really, it is -- it's all about those massive cuts, $110 billion of spending cuts. That is something that they kicked across -- kicked the can on for two months or so. So, could we actually see ourselves going through a similar process here when we have the negotiations over the debt ceiling?

BLITZER: Yes, we definitely will see a similar, if not even more intense and bitter process in two months or so, whether at end of February or March or sometime like that when that debt ceiling has to be raised. The president has made it clear, he will not negotiate on that. I don't know exactly what he means when he says he won't negotiate. He says he's not going to even let that come up as an issue.

But in order for the debt ceiling to go up, the Senate and the House have to pass legislation raising the debt ceiling and it's clear the Republicans, at least the House of Representatives, many of them want to use that debt ceiling as leverage on the president to get what they want, namely, much more significant spending cuts, especially entitlements, Medicare, Social Security, making major reforms or changes down the road, and also domestic programs. They don't want to see cuts in defense spending while the liberal Democrats want to see significant defense cuts. So, there will be a huge battle at the end of February or March, around that time when that debt ceiling comes up once again.

MALVEAUX: All right. Well, thanks. We're going to be watching very closely. We want to get the nuts and bolt of the plan as it stand stands now. Business Correspondent Christine Romans, she's joining us here. Christine, first of all, you know, there's a lot to go through, but essentially there are some folks who were basically spared from these tax increases but there are -- there are tax goodies, there are tax credits, all kinds of things that happened. Go through what it means for most of us, most Americans, in terms of at least on the Senate side.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: So, it means the status quo for 98 percent of Americans, right? It means that your tax rates won't go up. It means, for doctors, they won't have a real big cut to how much they're getting -- they're getting for reimbursement from Medicare, right? And it means, for the jobless, they're still going to be able to get a jobless check if you're on extended unemployment benefits. You know, for 2 million people, Suzanne, that ran out December 29th.

If the Senate and now, of course, the House, if they don't do an extension of federal unemployment benefits, you're going to see a lot of people suddenly not have hundreds of dollars a week to spend for those jobless checks. It also means, for another million people who were facing the end of their state benefits in the beginning part of the year, they wouldn't have been able to get federal benefits either. So, there are really -- 98 percent of people are going to get the status quo, either the continuation of their jobless check, for a doctor, the continuation of their billing as it is right now, and for working Americans, a continuation, of course, of their -- of their -- of their pay rates.

But one thing that's really important -- their interest -- in their tax rates, one thing that's important to note though, even though your tax rates aren't going up, you still could see a smaller paycheck. And you and I keep talking about this. The payroll tax holiday, that wasn't going to be continued -- that wasn't going to survive the fiscal cliff and we all knew it. But that means you're going to have a smaller paycheck, maybe $10,maybe $15, maybe $20 a paycheck is going to be less, so people really need to plan for that.

MALVEAUX: And explain this, Christine, there is something very interesting. This is folks making between $250,000, $400,000 that the taxes are not going to change but they could be paying higher taxes because of other things that happened and that has to with itemizing deductions when you file for tax returns.

ROMANS: That's absolutely right. So, remember the president initially said that he wanted to raise taxes on the rich? People who make $250,000 a year or higher. In the end he raised -- they're raising -- you know, they're trying to raise taxes on people who make, you know, $400,000, $450,000 and higher. But they're going to limit itemized deductions, personal exemptions for individuals earning more than 250 and households earning more than 300. So, technically, the tax rates could stay the same for these people, but if you limit their deductions, they could have a higher tax bill, that'll get some revenue, too.

MALVEAUX: When you take a look at the Senate plan, are there winners and losers when you look at this overall big picture?

ROMANS: Winners or losers, you know, I look through and I see a lot of compromise, actually. I see compromise in the estate tax, you know? I see compromise there. I see a win for the president, but I also see a big win for Republicans because of the amount of exempt, you know, estate -- the size of the estate that is exempt is pretty big so I see that there. I see -- you know, look, I look out at this and I see peril because you look at the House. You still have to get through the House part of this process, don't you? And that's something that's still an unknown here. We're just sort of beginning that process right now.

I look at the markets and how the markets could react, and, you know, I mean, the markets are expecting a resolution, investors are expecting a resolution. If you get some sort of setback in the House, the real loser is going to be your 401K, it's going to be market stability. So, I think people -- members of Congress, and some of them I have talked to, who fresh in their memory is 2008 when they didn't pass the bank bailout and the markets went haywire. They don't want that to happen again. They're got the markets closed today. They've got a House that's looking at this right now. They're trying to avoid that.

MALVEAUX: And they got a new Congress coming in on Thursday. All right. Christine, we're going to be watching all of this. And as Christine points out here, some people look at the 11th hour compromise in the Senate as a win for the president. But, you know, what's going to happen if the House actually sends the deal back? We're going to go live to the White House, up next.

(COMMERCIAL BREAK)

MALVEAUX: Well, it took until the wee hours of the morning, but the Senate passed its fiscal cliff deal with an overwhelming bipartisan vote of 89 to eight. Now, it is up to the House to seal the deal. I want to bring in Jessica Yellin at the White House. Jessica, we know the vice president meeting with the House Democrats, very instrumental when he was working with the minority leader -- Senate minority leader, Mitch McConnell. What's his relationship with the Democrats on the House side?

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Oh, well, he's sort of uncle Joe, if you'll -- if you will. He is the guy who sort of shoots from the hip, says it like it is, that's his reputation, and who can take incoming fire. If there's a sort of decorum around the president where people are uncomfortable by speaking to honestly in front of him and the president has to be more careful about what he says, that's a different -- slightly different dynamic when Joe goes up to the Hill.

So, you could expect this to be a quite -- a frank exchange where people who are angry will let him -- them -- him know it and there are progressives who think, as always, that the White House just gave away way too much in this deal, they gave up their leverage to negotiate in the debt ceiling. They should have included a debt ceiling component to this. They shouldn't have let the tax rate be set so high, et cetera. So, I'm sure he will hear all about that. Moderates will have other issues and then he'll make the case from the White House why they took this deal and why it sets the White House, in their view, up and Democrats up for an effective hand as they continue their fight.

The one thing about the vice president is, sometimes when he goes to these meetings, he says things that are very colorful and they leak out. It's been surprising that this has been very low profile. We have not heard any leaks during this whole negotiation, Suzanne. MALVEAUX: There is kind of a rare discipline, it seems. That's coming from the White House now. Do we have a sense of what the president's role has been, if the vice president and President Obama are in constant discussions or is he giving him a little bit more wiggle room here?

YELLIN: The president has been very -- my sources say the president's been very clear about what he will and will not accept in this deal. But he has not been the one on the phone with Senator McConnell, because the vice president and McConnell have this historic relationship. As you point out, McConnell likes working with the vice president and Biden has been called the, quote, McConnell whisper, whoever that really means. But it means, I guess, he can get stuff done.

So the president, for example, I'm told, in the late night Oval Office pow wow that went until 2:00 a.m., I believe it was Sunday night if I can get my days straight, made it clear in a discussion with the vice president and staff that he just would not accept a deal if it did not include this postponement of the spending cuts. There had to be a pay down on about $24 billion of the deficit. So we will have two months to argue out the debt ceiling and the sequester. So that was, for example, a bright line the president laid out to Vice President Biden and the staff, said that had to be in the deal or no deal.

Suzanne.

MALVEAUX: All right. And, Jess, it might be a little too early, too soon, but do we have any read out, any sense of how the meeting's gone between the vice president and the House Dems or are we still kind of working on that?

YELLIN: I am not getting any -- any read-out yet, because I think it's ongoing. But I will tell you that there is, even going into it, a sense of optimism here. The staffers who were working well past 2:00 a.m. last night still have not booked their vacation -- well, they have not left on vacation, but I think they're approaching the point where they might feel comfortable booking their vacation travel just for a few days. You get the sense they think that this is going to wrap up. So that's how it could go --

MALVEAUX: Yes, strange that that's how we're getting our information these days. We have to look at people's travel and vacation plans. But, yes, it could give us a little inkling that we're getting close to the end here. Jess, thank you so much. I appreciate it.

YELLIN: They're still hard at work here. Yes.

MALVEAUX: OK, thanks.

The vice president, as Jessica mentioned, is meeting with House Democrats to discuss the fiscal cliff. We're actually going to hear from one member of Congress who's part of those meetings, Representative John Yarmuth. He's going to join us next.

(COMMERCIAL BREAK) MALVEAUX: A critical moment for the financial future of the country, the deadline for this dreaded fiscal cliff. It passed at midnight. Right now, House Republicans, they're not prepared yet to vote on the compromise that was approved by the Senate. Well, the vice president, he was instrumental in getting the Senate deal passed. So he went back to Capitol Hill today to meet with the House Democrats.

Congressman John Yarmuth of Kentucky was among those who met with the vice president.

Congressman, thank you for joining us. We appreciate that. We understand that you actually left that meeting that the vice president was holding with your colleagues to talk with us a little bit about what is taking place. What is the push coming from the vice president today? What is he saying about the deal that was made on the Senate side?

REP. JOHN YARMUTH (D), KENTUCKY: Well, Suzanne, I think what he's been trying to do, and true to his image, he has been going on for some time with the Democratic caucus, but he has gone through the elements of the deal point by point, explaining what the options were, where the Republicans might have had some give and where the White House wanted to remain absolutely steadfast.

And I think my impression, as I left that meeting, and he'd gone through pretty much the entire deal, was that there's no way that we could have gotten any deal from a Democratic perspective, that it was -- that was more supportive of our values than the deal that has been negotiated.

MALVEAUX: And what was -- what were the points that he said the White House essentially had to have as part of that package, part of that deal, where they would not move?

YARMUTH: Well, one of the ones, for instance, was the extension of unemployment benefits for one year. The Republicans apparently wanted to extend them just until -- just for about 60 days to correspond to the other things that had been delayed, but not extended for longer. The White House held out very strongly for a year's worth of extension of unemployment benefits.

Similarly, the issues such as the earned income tax credit, the child tax credit and the Affordable Opportunity Act, tuition credits, was something that the Republicans didn't want to extend. Some of them at all. They basically said, apparently, we'll take -- we'll give you one of them, one of the three, and they were very strong in saying, no, we want all three, and they extended them for five years.

So there were a number of things -- and, of course, there were issues with regard to the threshold. That was a significant issue. Republicans wanted to go to $500,000 and the White House was very, very strong and said they would not go to $500,000.

MALVEAUX: And did the vice president say that there was anything from the House side that was negotiable. That they would be willing to let go of in order for these two -- the Senate and the House to come together?

YARMUTH: Well, I'm not sure that there was anything that was -- that they would let go of. The -- some of the issues that -- where they really couldn't find agreement, or they were too complicated, such as what you do with the sequester, the across the board spending cuts, were pushed down -- pushed down a couple of months. But it sounded to me as if the vice president pretty much was able to negotiate everything that the Democrats wanted.

At the outset, he stressed very, very strongly that things like changing the way we calculate Social Security benefits, what's the so- called chained (ph) CPI, was off the table to begin with and he was very clear with Senator McConnell, apparently at the outset, that if these things, such as the chained CPI, were part of the discussion, that there was no reason wasting either of their time. So, I think they took care of those items right at the outset.

MALVEAUX: Did he say, did he encourage when you guys should actually vote on this? Did he say, get this thing done today?

YARMUTH: Oh, he hadn't while I was in the meeting. I think the Republicans are meeting, their conference is meeting right now. It looks like, from all we can tell, that they're going to not enforce the so-called Hastert (ph) Rule, where they are to have a majority of their majority in order to get it to the floor. Speaker Boehner, to his credit, is apparently willing to bring this to the floor. And it's also my understanding, speaking to some of my colleagues who had spoken to Republicans, so it's twice removed, that some of the Republicans in the Senate have actually left and told Republican leadership here, don't send us anything but what we sent you. So it looks like I think there will be a vote, my guess is, sometime later today, at worst tomorrow morning. But I think we're going to get this done.

MALVEAUX: And, finally, you said he did much of the talking. You know, typical Biden style, doing a lot of the talking there. But did he get an earful from some of your colleagues or even yourself, people who might be frustrated that the White House compromised a little bit too much?

YARMUTH: Well, he was still talking when I left. He had not yet opened the floor for questions. I'm sure that there are a few members who are going to be upset. I know there are a number who felt that we gave far too much on the revenue side, that wanted to stick with that -- the original $250,000 threshold to increase taxes on the very wealthiest Americans. But I think he made a very compelling case as to why that was not possible and why this was essentially a very good deal, which provides an awful lot of revenue toward deficit reduction.

MALVEAUX: And, congressman, two questions here.

YARMUTH: Sure.

MALVEAUX: Are you willing to support the Senate deal? Do you feel that that is a fair way going forward? And do you think that the rest of your colleagues on the Democratic side would do the same? YARMUTH: I'm -- I strongly support it. I think it is a good deal. And many of the principles that are included were things that I've been talking about for weeks now. I think the overwhelming majority of our caucus will support the plan. Even though some are going to have to swallow hard to do it, I think they'll still vote for it.

MALVEAUX: All right, Representative Yarmuth, thank you so much. We appreciate it.

YARMUTH: My pleasure.

MALVEAUX: Get back in that meeting and then come out and fill us in again.

YARMUTH: All right, thank you. All right.

MALVEAUX: Let us know if there's any fireworks or anything else that comes out of it. We appreciate it very much. Thanks.

YARMUTH: OK, Suzanne.

MALVEAUX: It is about a deal or no deal. Some of the American people not sounding happy with members of Congress, how they're getting business done. Take a listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I think it's sad that we pay politicians to protect our country and our interests and that they've totally ignored us.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

MALVEAUX: The stock market is closed today, New Year's Day, of course, but we don't know how Wall Street's going to react to the Senate deal on the fiscal cliff. Alison Kosik is at a New York City diner.

We're still waiting, of course, for the House to come up with its own version. What do we make of what folks think about what has been put on the table here, at least preventing some middle class folks from their taxes going up?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Yes, we certainly are having some great conversations with a lot of people here at this particular diner. They're having breakfast. The food looks great. And we're having, once again, some great conversations here at the Tick Tock Diner. We couldn't think of a more fitting place. Tick Tock Diner. Get it? The clock's been ticking on the fiscal cliff.

MALVEAUX: Get it. Get it.

KOSIK: Yes, yes, yes. Oh, yes. But it is a great pun, isn't it? Very fitting. A lot of people talking about frustrations and what their thoughts are about how Congress has handled this whole fiscal cliff situation. I want to talk with Kelly (ph) about that. You have some strong thoughts about

KELLY (PH): I do. I just think it's really hard that they keep doing this over and over again. Last year was the debt ceiling. This year it's the fiscal cliff.

And it just seems like they can't get their act together year after year. And it's so frustrating to sit here and, you know, just watch it happen over and over again. Especially we're all students so it affects us a lot. So it's really -- it's really frustrating.

KOSIK: Julie (ph), do you see yourself maybe changing your mind about who you necessarily vote for in the next election based on how members of Congress have handled this situation?

JULIE (PH): Actually, no. I feel like a lot of this has come from the partisanship which is really what's creating the gridlock. In my opinion, I think the Far Right of the Republican Party's kind of holding Congress hostage to a point.

I mean, Mitch McConnell says he wants to strike a deal. But if you think about it, history states -- I mean, they've been the party of no. He said from the beginning if Obama wants it, why are we going to do it?

And at the end of the day, Congress can sit around, but these are the kind of things that directly affect us. I mean, as students, like Kelly (ph) said, I think about the tuition tax breaks, things like that are going to go away and directly affect my family.

And it might sound kind of liberal, but when I look at Congress, I see it's kind of shifted to one side. I don't know. I just feel like they really need to step up and kind of make a compromise.

With Obama it's kind of like a mandate, with the taxing the wealthiest Americans, if he's elected -- which basically kind of by a landslide -- maybe they need to kind of catch up and form and modernize the party.

KOSIK: How much does the political posturing, though, how is that to watch this sort of churn day after day for the past several days?

JULIE (PH): It's rough. I mean, was watching yesterday when the president finally spoke, hoping that maybe they had come to some point. And even just hearing him say, oh, we're close but not there yet, it's just kind of like these are the things that directly affect Americans.

And if this is your job, and this in is why we elect you, it's waiting each day, each day, it's just kind of like -- it's cliff, even though cliff is slightly a misleading term, it is a good term. It's like jumping over, waiting for something to kind of hit us, that really shouldn't be there at all.

KOSIK: All right. Well, thanks so much for your thoughts. You know, one other person I talked with had one more thought, saying that it's a shame that the U.S. economy is being held hostage by the U.S. Congress. Something to think about as we continue our New Year's Day, Suzanne.

MALVEAUX: Alison, it was fascinating to hear that young woman's point of view there. They're obviously students and they're paying really close attention. Do you get that sense for most people where you are, that they are really following this and understand how this really affects them?

KOSIK: I think they do. You know, I also sort of took a mini-poll about what -- and this wasn't directly related with the fiscal cliff, but the payroll tax holiday, going away. They -- a lot of people I talked with were -- you know, they were discussing with me where they're going to cut back starting this year because that payroll tax holiday is going away.

So they're already discussing what changes they're going to make in their own budget. So it's not just the fiscal cliff because many people are also sort of, you know, sort of looping in the payroll tax holiday to that as well.

But as far as the fiscal cliff goes, they don't know the minute details, but they have sort of a better understanding, though, of the overall back-and-forth that's been going on.

And the majority of people are saying they're frustrated. Even though they know Congress is hard at work during the holidays and they're hard at work overnight, they understand that.

But at the same time, they also tell me -- lots of people tell me Congress knew that this deadline was coming and that they did, in fact, wait until the last minute. And for many of these people who are voters, they're frustrated, Suzanne.

MALVEAUX: All right. Alison, thank you. You're absolutely right. A lot of people who work really hard all year round on the weekend, stay up late, they expect their representatives to do the same. Thank you very much.

Deal or no deal, rolling down the fiscal cliff, let us know what you think about all this. This is the gridlock in Washington. This is your taxes. This is your family. This is your future. Visit ireport.CNN.com. Share your messages. And we're going to put it on the air. Let us know what you think about all of this. We'll be right back.

(COMMERCIAL BREAK)

MALVEAUX: Deal or no deal. We asked you to weigh in on the fiscal cliff debate. Here what some of you had to say. Listen in.

(BEGIN VIDEO CLIP)

SHANNEN BAZZI, IREPORTER: My New Year's message to Washington is that this entire fiscal cliff problem isn't just an isolated incident. It's representative of how partisanship and polarization have taken over Congress.

I'm 18 and I go to college in D.C. I used to be excited for the future. But I don't want to live in a country that doesn't have a successful working legislator. Congress, it's time for you to remember what your purpose really is, and get back to doing your job.

TYLER STOCKS, IREPORTER: Resolution for Washington is to get out of the Middle East, learn to live on a budget like every other American does, and the third thing is to reform the tax code. I think it's sickening to think that politicians just cannot get along; they're like cats and dogs. So I hope you guys have a good New Year and hopefully we can get something done.

(END VIDEO CLIP)

MALVEAUX: All right. Do you have a message? Let us know what your New Year's resolution is for Washington. Visit ireport.CNN.com.

And the new year, new laws. Starting today, several states have some new rules that are going into effect. Want you to take a look at a few of those. We've got those coming up next.

(COMMERCIAL BREAK)

MALVEAUX: "Oh, the Places You'll Go." That famous Dr. Seuss book is the theme for this year's Rose Parade in Pasadena. Hundreds, thousands lined the streets to see the spectacle, 42 floats, 23 marching bands, 21 equestrian units. And also a couple of firsts.

The first float by the Defense Department and the first time a couple got married on a float. Congratulations to them.

All right. New year, bunch of new laws just went into effect, 400 new laws actually. And we're going to tell you a little bit about them. Some are a little strange, others not so much. But let's start off with Illinois.

(BEGIN VIDEO CLIP)

Middle school students must now learn how to use a defibrillator.

It is now illegal to possess or sell shark fins in the state.

And it's a felony for sex offenders to dress up as Santa Claus or the Easter Bunny. They also can't hand out candy at Halloween.

I want to go to California. Let's see what they've got on their books now.

Employers there can't require employees or job applicants to disclose their social media passwords. Illinois just passed a similar measure, by the way. And did we really need a law for this one? This is law enforcement officers are not allowed to have sex with anyone in custody. Yes, that's a given. And Californians can no longer let their hunting dogs chase bobcats or bears.

And finally, Maryland, same-sex couples started tying the knot at midnight, that's when it became legal for them to get married. Maryland voters approved same-sex marriage in November. Another new law that affects farmers: chicken feed containing arsenic now prohibited.

And in a move to protect kids from identity theft, credit agencies must now put a freeze on minors' credit reports if their parents ask them to. Interesting.

(END VIDEO CLIP)

MALVEAUX: They were convicted 40 years ago, their convictions overturned more than 30 years ago. Well, now the Wilmington Ten are finally pardoned.

MALVEAUX: Civil rights activists convicted in a 1970s firebombing have been pardoned 40 years later by North Carolina's governor. The group known as the Wilmington Ten includes civil rights activist Benjamin Chavis.

Victor Blackwell is joining us. And tell us, first of all, remind us of the Wilmington Ten, what they were accused of.

VICTOR BLACKWELL, CNN CORRESPONDENT: Well, finally, some justice for the Wilmington Ten, Suzanne, but only six of them are still alive.

We've got to go back to 1971, after the desegregation of schools in Wilmington, North Carolina. The black high school in that city was shut down; there were boycotts, there were protests and Ben Chavis, then a reverend -- well, still a reverend -- was called in to try to quell some of the violence.

On one night of rioting a white-owned supermarket was firebombed. Chavis, eight other black males and one white female, who you're seeing on your screen now, were convicted of arson and conspiracy and sentenced to a combined 282 years. No one was killed in this fire but they were convicted.

And a few years later, one of the witnesses recanted his story from the trial and said that he was coerced and bribed; others did the same. Their convictions were overturned and they were released after about eight years.

And just yesterday, North Carolina Governor Bev Perdue pardoned them and gave them a pardon of innocence.

And here's part of what she said. "These convictions were tainted by naked racism and represent an ugly stain on North Carolina's criminal justice system that cannot be allowed to stand any longer."

But, again, four of the Wilmington Ten have since died before they saw that statement from North Carolina's governor.

MALVEAUX: So, Victor, why did it take so long?

BLACKWELL: Well, it happened because, after probably 25-30 years some notes were found and passed from the NAACP, the state chapter of North Carolina, over to an historian.

He then flipped through and saw the prosecutor who ran the jury selection had written notes next to jury numbers, one that said "KKK, good;" another, "Uncle Tom type." And he wrote next to one woman's number, "No, she associates with Negroes."

And that happened just this summer. Also with Ben Chavis handing over 130,000 signatures for a petition to have them pardoned as innocent, but the relatives of those who have passed away and one of the Wilmington Ten say that the past 40 years have really been a nightmare. Listen.

(BEGIN VIDEO CLIP)

OPHELIA TYNDALL DIXON, SISTER OF CONNIE TYNDALL: It has not been easy. When the fellows will go look for jobs, they were turned down. They were ostracized. People just talked about them, even our own family,. The whole community did not stand together.

MARVIN PATRICK, ONE OF THE WILMINGTON TEN: They're convinced in their own minds and heart (inaudible) that somebody did it, you know? So I mean, we were chosen victims of crimes that we didn't commit.

BLACKWELL: And they've still not found who actually firebombed that supermarket, Suzanne.

MALVEAUX: All right, Victor, thank you very much. Appreciate it.

Secretary of State Hillary Clinton being treated with blood thinners for a blood clot that doctors discovered behind her right ear. It is in a vein between her brain and her skull. Doctors say it did not cause a stroke or any neurological damage. They expect Clinton to make a full recovery.

Dr. Sanjay Gupta takes a look at what some concerns are.

(BEGIN VIDEO CLIP) DR. SANJAY GUPTA, CHIEF MEDICAL CORRESPONDENT: Let me show you here by way of model. First of all, this is on the right side of her head, but for the -- for this demonstration, I'll show you the left side of the head for this model. Here you have the brain. Again, if the clot was actually pushing on the brain you wouldn't give blood-thinning medication.

But rather, in this case, the blood clot is located in one of the blood vessels inside the brain, a vessel that drains typically drains blood away from the brain. It's called the sinus here. In her case, it's actually in this area over here, the transverse sinus, again on the right side of her brain.

This is a pretty rare condition. This is something that doesn't happen often. But it needs to be treated with blood-thinning medications to try and make that clot dissolve.

Here's the concern: you have blood going to the brain. That blood also needs to leave the brain. If that blood is not leaving the brain, the pressure in the brain can start to build up. And that's what you don't want to happen.

(END VIDEO CLIP)

MALVEAUX: Clinton remains at a New York Presbyterian hospital for now.

For more on Secretary of State Clinton's health and other reporting, check out CNN.com/health.

Well, it was a year of wild, destructive weather with some of the parts of the country still reeling this New Year's Day. We want to look ahead to what could be coming in 2013.

(COMMERCIAL BREAK)

MALVEAUX: 2012, a bad year for weather disasters. In the United States alone disasters killed 349 people, caused billions of dollars in damage, and worldwide thousands were killed in flooding and severe cold weather. Here is a look at back at the impact throughout the year.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Well, people in the Philippines dealing with some of the worst flooding they have seen in a lifetime. More than half of the capital, Manila, underwater now.

HALA GORANI, CNN INTERNATIONAL CORRESPONDENT: Drenching monsoon rain has triggered widespread flooding. Desperate and difficult evacuations are now under way.

UNIDENTIFIED MALE: The main concern right now in this area is getting these people to higher ground as the floodwaters are rising and more rain is in the forecast. As you can see, this shanty town is completely submerged in water. You have people in boats trying to pick valuables out of this debris that is just being swept through this fast-moving current of water.

MARI RAMOS, AMS METEOROLOGIST: We have been measuring the rainfall across Manila no longer in centimeters, but in feet. Another foot of rain fell in the Manila area in the last 24 hours. Unfortunately, there is more rain to come.

(MUSIC PLAYING)

UNIDENTIFIED FEMALE: Floodwaters rise in southern Russia, sweeping through houses as people slept, unaware and vulnerable. Officials say one town actually got two months of rain in 24 hours; another town, five months' worth. And Itartas (ph) news agency says in one community, floodwaters rose 7 meters, 23 feet overnight.

UNIDENTIFIED MALE: The floodwaters have receded from the streets. But as they have receded they have revealed a scene of absolute devastation.

UNIDENTIFIED FEMALE: Russian officials are calling it the worst disaster in the region in a decade. Several districts have been declared emergency zones.

UNIDENTIFIED MALE: And people wandering around in a state of shock.

UNIDENTIFIED FEMALE: Officials say at least 171 people were killed.

UNIDENTIFIED FEMALE: When we went to the town mortuary earlier on, there simply wasn't enough space in the mortuary for all the bodies and so local supermarkets have had to lend refrigerated trucks for help with the backlog of dealing with all of those bodies.

UNIDENTIFIED FEMALE: State media reports more than 5,000 homes were overrun, disrupting the lives of 12,000 people.

UNIDENTIFIED MALE: Buildings have literally been smashed to pieces. There's a lot of wood and destruction here. They have been ripped to pieces, unfortunately, a lot of them with people still inside.

GORANI: There is a lot of anger at the government from ordinary people.

KRISTIE LU STOUT, CNN INTERNATIONAL ANCHOR: As the recovery operation gets under way, residents are demanding to know why they were not given adequate warning.

UNIDENTIFIED FEMALE: They've had a mandatory evacuation order in effect.

GOV. CHRIS CHRISTIE (R), N.J.: The fact that some decided to disregard my instruction, my order, and I'm concerned that it might lead to the loss of life.

CHAD MYERS, AMS METEOROLOGIST: It is on the way to landfall, probably just a few hours from now. The wind field is bigger than a category 1. The surge will be bigger than a category 1.

UNIDENTIFIED MALE: This should all be sandy coastline right here. But now it is a foamy, brown mess of Atlantic angry ocean, thanks to Hurricane Sandy.

UNIDENTIFIED MALE: We did begin an orderly shutdown of the subway system at 9 o'clock.

UNIDENTIFIED MALE: There is a ship presently out at the mercy of the ocean, a ship with 17 people on board.

UNIDENTIFIED FEMALE: And Sandy is forcing both campaigns and some boaters to make some changes.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Anything they need, we will be there. And we're going to cut through red tape.

UNIDENTIFIED MALE: We are seeing a large number of fires caused by downed wires and electrical problems relating to outages.

UNIDENTIFIED MALE: Can see flooding on the FDR Drive on the east side. On the lower east side of Manhattan, we have seen flooding in a number of subway stations as well, water pouring down.

MAYOR MICHAEL BLOOMBERG, (I) NEW YORK CITY: Make no mistake about it, this was a devastating storm, maybe the worst that we have ever experienced.

BLITZER: Hurricane Sandy's impact on the United States has been devastating and heartbreaking. And the response has been heroic and inspiring.

(END VIDEO CLIP)

MALVEAUX: So why was 2012 such a bad year for weather disasters? What can we expect in the new year?

Chad Myers joins us to talk a little bit about this.

And we saw really quite impactful that Hurricane Sandy and a lot of talk about the possibility of these superstorms in the future, more of them.

Do we suspect that that is something that we're going to see this year?

MYERS: Maybe not this year, but certainly in the coming decades we will see the strength of storms be more impacting of people along the coast and where people live. We're putting more people in harm's way now.

Let's say Hurricane Sandy hit in 1900. Certainly would have done a lot of damage. But wouldn't have affected really the tens of millions of people. Wouldn't have done the hundreds probably by the time it is done worth of billions worth of dollars worth of damage because there wasn't that much property. Not that many people there. But now that we all want to live along the coast, we all want to live in beautiful places and many times beautiful places are the places that are in the most danger. I mean, we're going to see in 2013 the persistence of the big drought.

The drought is still out here in the Midwest. It is not going anywhere. For the next three months, forecasters are saying there is not even going to be that much rain. And that's not atypical of what a drought is.

Once the ground is dry, Suzanne, there is no evaporation there. There's no more humidity in the air above that ground because it is just parched land. So there is no humidity to make clouds; if there's no clouds, there's no rain. So that is just that snowballing effect that we see here.

Will there be bigger storms in the future compared to the ones we saw 100 years ago? Yes, probably. The water is warmer. The Arctic Ocean doesn't have much ice in it, the lowest Arctic Ocean ice ever on record. The water temperature when Hurricane Sandy was there, 2 degrees warmer than it should have been.

Did that make Hurricane Sandy bigger? Probably, 10 percent bigger, whatever it might be. But if you're breaking records every year, 2012 will go down as the warmest year ever for the U.S.

Then you know something is going on. And it is -- whether you believe it is manmade or not -- and we do believe it is manmade, at least partially, if every storm is 10 percent bigger than the last record storm, you're going to start to get people in danger, especially along these coastal communities.

MALVEAUX: All right. We'll have to be mindful of that, protect ourselves. Chad, thank you. Good to see you. Happy new year.